I just started a new job with a health plan that includes an employer contribution to an HSA. This is my first time ever having an HSA. Until I started looking, I thought an HSA was something that I could open with any bank, so I was thinking of just setting one up with mine (Ally). Unfortunately that's not the case.

How should I go about finding find all (or most) of the HSAs, or at least the best ones, that are available to me? For example, can/do credit unions offer HSAs, or is that something I can just cross off my list even before the search?

For my specific situation, I plan on probably using this money so I am hoping to find some savings-account-like HSAs with high-ish interest rates, and would be happy to hear answers specifically catered to that, but my main question (and the one that is most generally useful) is how to go about finding these in the first place.

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    Are you sure you can pick one? Most commonly the employer sets that up with a vendor of their choosing, like their health insurance plan. Typically you then have options on how the money is allocated within the HSA, so you can choose a mix that suits your risk tolerance.
    – Hart CO
    Sep 25 '19 at 4:39
  • @HartCO, my employer literally told me to set one up myself and tell them where to send the check. Sep 27 '19 at 1:53
  • That's kind of funny, just figured I'd mention it since it's atypical, good luck on your hunt!
    – Hart CO
    Sep 27 '19 at 2:08
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    This is not a product or service recommendation question. It does not ask “Which HSAs are the best?” Instead, it asks, “How do I find good HSAs?”, which, in my opinion, is on-topic. I am voting to reopen this question. Sep 27 '19 at 2:08
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    @chepner I wouldn’t ask the insurance company about HSAs. The HDHP legally allows you to contribute to an HSA, but other than that, the two are completely unrelated. Sep 27 '19 at 14:19

By adding a phrase to your statement it becomes true:

I thought an HSA was something that I could open with any bank that offers one.

Of course this only helps you if your employer offers the ability to direct deposit into any HSA account. Mine does, and it appears that yours does too. You'll need to shop around like you would for opening a checking or savings account with a bank, but here are some important considerations when choosing an HSA account:

  1. What is the minimum balance you need to maintain to avoid any monthly fees?
  2. What are the requirements for withdrawing from the account? Some banks force you to upload medical receipts, whereas others allow you to annotate your withdrawal with a custom note. This is more of a personal choice: if you are ever audited, do you want to track receipts yourself or do you want the bank to help you do it?
  3. Do you have other accounts with the bank? If yes, it may be faster and less of a hassle to transfer funds to and from your HSA and your personal account when needed.
  4. If you don't intend to spend your HSA money right away, does the bank allow you to invest your HSA funds?
  5. Do they offer a debit card option? (Nearly all do.)
  6. Do they offer interest on the account?

This should help you narrow down the options. And yes, some credit unions offer HSAs too.

  • I would add to this - since the OP mentioned credit unions in the question: many credit unions offer HSA products, too (not just banks).
    – dwizum
    Sep 27 '19 at 17:22
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    @dwizum noted, and updated, thx.
    – TTT
    Sep 27 '19 at 17:49
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    "Of course this only helps you if your employer offers the ability to direct deposit into any HSA account." Err... I thought an HSA is available to anyone on a HDHP regardless of whether or not the employer offers direct deposit.
    – NPSF3000
    Sep 27 '19 at 22:59
  • @NPSF3000 yes, that's true. I didn't mean that in general, I was referring to the context of this question and receiving the employer contribution. (Compared to being forced to use the employer's preferred bank.)
    – TTT
    Sep 28 '19 at 0:10

First, to answer one of your questions, I would say that most banks and credit unions in the U.S. do offer HSA accounts.

When selecting an HSA, it comes down to how you intend to use it.

Some people (like myself) have a lot of medical expenses, and not a lot of extra cash laying around. For those of us in this situation, the interest rate/investment options of the HSA are not important, as the money will not be sitting in the HSA for long. Instead, the most important features we are looking for are low fees, ease of use, and customer service. By looking at your local credit unions and banks to see what they offer, you will probably find something in your area (perhaps with the same institution that already provides you with a checking or savings account) that is a good fit for you. Look for something with no on-going fees.

Be sure to ask about how to reimburse yourself/take distributions from the HSA. I prefer a credit union that does not restrict my access to the money in any way. I can take a distribution by using a debit card, writing a check, going to the website and transferring money to my checking account, or even by showing up at the local counter and withdrawing cash. My credit union never asks me to justify a distribution by showing a medical expense receipt; the responsibility to ensure I am using the funds in a tax-penalty free way is entirely mine. Some people may not like this freedom, preferring a bank that will protect the customer from making mistakes, but I prefer to keep track of my own expenses and receipts. You should choose an HSA institution that makes using the money easy for you, however you define that.

Some people are in the fortunate situation where they don't forsee using much of their HSA contributions for many years. These people want to look for an HSA account with investment options, and are not so concerned with having local customer service, instant access to the funds, or with small fees associated with small balances, etc. If this is you, and you see the HSA as an investment vehicle, then perhaps the local bank/credit union is not the best place to look. Instead, you might want to look at large, national providers. Perhaps you can look to your brokerage or mutual fund company to inquire about HSAs. For example, Fidelity offers their own HSA, and Vanguard, while not offering an HSA of their own, has a page listing HSA providers that allow investments in Vanguard funds.

In conclusion, decide what your goals are for the HSA, and then you can find an HSA that will help you meet those goals.

  • Upvoted for mentioning ease of use and access to funds. I don't think people realize how different this can be from institution to institution.
    – dwizum
    Sep 27 '19 at 20:00

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